You've been quangoed

In a little-noticed report published alongside last month's Budget, Reforming Arm's Length Bodies , the Treasury set out a new charter for how quangos should be created, run and removed. At its heart was recognition of two problems. First, the relationship between government departments and their arm's-length bodies is a messy one, complicated by duplication and overlapping responsibilities. Second, many quangos offer poor value for money, being prone to inappropriate lobbying of ministers and outliving their useful lifetime. The Treasury's first step in tackling the problem is to make it harder to set up new bodies. Under the proposals, government departments would have to prepare a business case for any planned quango, forcing them to prove that they have looked at all the possible alternatives first. Legislation creating new quangos would generally have to include so-called sunset clauses spelling out when they would be disestablished. Once they are set up, quangos would be, for the most, part barred from marketing and lobbying ministers, the Treasury says. They would also be forced to publish more information on what (and how well) they are doing. The limits of autonomy But it is the attempt to clear up the relationship between quangos and their parent departments that may have the greatest long-term effect. Departments will have to publish a "framework" document setting out the limits of each quango's autonomy. Those documents will be reviewed every three years, or when the functions of a quango changes significantly or their chief executive departs. Government departments will have to look at what bodies they are sponsoring, in order to rule out duplication, and report back at the next spending review. Quangos will also be regularly reviewed to make sure they haven't outgrown their size or remit. The Treasury report admits previous attempts, such as the quinquennial reviews, have been "poorly timed" and too expensive. To make them work better this time round, departments will have to publish a "risk-based review plan" that identifies potential problems created by each quango and how to deal with those problems. Quangos will then be subject to one of three things, depending on how risky they are deemed to be. They could face a simple review of their framework document and performance data. The next stage would see them subjected to the same capability reviews that the Cabinet Office already applies to government departments. Or, quangos could face a full purpose review looking at whether they still need to exist or whether their work could be done better "by other existing arm's-length bodies or private sector firms". At any rate, the pressure on quangos looks set to continue. The Institute for Government, an independent thinktank, is already looking into how well they function. A confusing regime "Our initial research shows that quangos and their sponsor departments suffer from a confusing regime," says Tom Gash, a fellow at the institute, "often with unclear roles and responsibilities, where there is often a disconnect between form and function." The institute's report, due out later in the year, will make proposals to address these issues, he adds.